Has Germany taken Prozac? On Sunday, voters will decide who'll be in the next government, yet everything seems so different from four years ago. The mood around the last general parliamentary election seemed feverish by hindsight – a vote that would decide the future destiny of Germany, a Schicksalswahl. Which government would at last have the strength to modernise our struggling social and welfare systems, adapt to the ageing population, create jobs? Then, there were more than 5 million people unemployed, the mood was dire, consumer spending low, the success of the country's big firms mainly based on exports.

The coalition government under former chancellor Gerhard Schröder (Social Democrats) and his foreign secretary, Joschka Fischer (Green party), seemed so out of their depth after having tried to adopt Tony Blair's New Labour reforms to a quite different German labour market system. Even traditional left-leaning voters considered voting for the other side – Angela Merkel and her conservative CDU. The Merkel of 2005 seemed to be a classic market liberal, demanding more freedom for big firms, lower taxes for companies and less regulation for financial businesses. She had promised to simplify Germany's convoluted tax system and she seemed to have big plans for the bureaucratic and expensive healthcare system. When she became chancellor, people compared her to Margaret Thatcher, the Iron Lady.

Four years on, we are in the middle of the biggest financial and economic crisis yet the mood is completely different. The election is surrounded by a certain boredom, with people distracting themselves by keeping the economy going, ie shopping. Consumer spending remains defiantly high, and while the unemployment figures don't look too bad, 3.5 million people are without jobs. For the next year the Nuremberg-based labour institute IAB forecasts 4.1 million unemployed, fewer than 2005. The German system of short-time-work, Kurzarbeit, where workers work fewer hours and their wages are subsidised by the government-run Bundesagentur für Arbeit, seems to be paying off. It's designed to enable companies to keep their workforce even in hard times, so when the economy picks up, they don't waste time looking for qualified staff. It has been extended to the end of the year, well after the election. That's also a reason why unemployment figures remain comparatively low.

Also, forecasts of growth rates look better than expected. The Institute for Economic Research recently said the economy would grow modestly at 1.5% next year. It's less than before the crisis, but still a sign that Germany will recover from the crisis more quickly than expected. It comes with a big price tag for the taxpayer though.

Due to the crisis, the country has moved more towards the left, illustrated by the incredible success of the Left party (the former East German communists) – and Merkel has moved with it. The price for the calm is high – the government has spent hundreds of billions of euros in investment programmes to battle the crisis. It leaves Germany with a record public debt. And nobody compares Merkel with Thatcher any more.

What an irony: a CDU chancellor with a natural distrust for state power has introduced more state power: she rescued banks, she rescued companies. In time for the election, Merkel's coalition also saved the struggling car-maker Opel by striking a deal with the Canadian-Austrian manufacturer Magna, in which Russia plays a big role. The deal is supported by a Russian state-owned bank, Sberbank. In effect, she has given taxpayers' money to help Russia's prime minister, Vladimir Putin, buy Opel – €4.5bn are supposed to go into the deal. According to news magazine Der Spiegel, she has assured Russian president Dmitry Medvedev the help, to get investment for a dying shipbuilding company at the Baltic Sea coast, near Merkel's constituency.

The government has also invented another highly expensive, highly questionable programme in the scrappage scheme, designed to keep the dying car industry going. It was highly popular – and supported an old-fashioned, polluting car industry because there were hardly any incentives to buy green technology. At the recent car fair in Frankfurt, Germany's car industry was massively lagging behind in building electric cars.

The scrappage scheme worked like this: You got €2,500 if you scrapped your old, at least nine years old, car, and bought any new one. The government invested €5bn but the money ran out three weeks ago. In August alone, 280,000 new cars have been registered.

There are big posters in various public places in Berlin, "We're voting for the chancellor", beside a picture of Merkel with a beaming smile, brimming with confidence, Merkel remains chancellor, it seems to say, what ever happens. It feels almost smug. She knows the most likely coalition is a continuation of the grand coalition, under her leadership.